Paytm early investor SAIF Partners may pocket up to $400M from part-stake sale

Multi-stage fund SAIF is one of the rare investors to have consistently drawn exits from its India portfolio including online travel booking site Makemytrip and local search platform Just DialSamidha Sharma&Digbijay Mishra | TNN | May 19, 2017, 10:42 IST

Venture capital firm SAIF Partners, an early-investor in Paytm, is expected to rake in around $300- $400 million in cash by partially selling its stake in the digital payments and commerce company as part of the company's latest financing round, people familiar with the development said.

This will be one of the largest cash returns clocked by a domestic venture fund from a consumer internet startup in a largely exit-starved tech ecosystem.

Multi-stage fund SAIF is one of the rare investors to have consistently drawn exits from its India portfolio including online travel booking site MakeMyTrip and local search platform Just Dial (both of which went public).

A majority of investors in the technology and internet sector in India are presently sitting on paper returns as their portfolio companies have not gone public or been sold creating a sense of skittishness among the VC community.

As reported in our March 28 edition, Tiger Global, the largest investor in Flipkart is currently negotiating to sell $1 billion worth of its shares to SoftBank, as part of a deal to get the Japanese investor on board the etailer. This will also see Softbank sell Snapdeal to Flipkart. This liquidity event will give Tiger the much needed cash from its investment in the Bengaluru-company after having ploughed almost $1 billion.

All told, SAIF has pumped $75 million since first backing One97 Communications as a mobile value added service delivery platform, a decade ago.

SAIF which had a 28.6% stake before the fund raise will stay invested in One97 Communications, the parent of Paytm, with a 20% ownership, sources said. Other early investors in the payments startup like Reliance Capital, Saama Capital and SAP Ventures had made a complete exit from the company at a valuation of around $5.7 billion to Alibaba.

SAIF Partners, which is on the road to raise its third India-dedicated fund with a $350-400 million corpus, invests largely in consumer internet startups but also has exposure to offline businesses and to the public markets in India.

Led by managing partner Ravi Adusumalli, along with Deepak Gaur, Mukul Arora, Vivek Mathur, Vishal Sood and Alok Goel, who are managing directors in the fund, SAIF has been one of the most prolific VCs in the current tech boom in the country. While most of its peers have been able to successfully mop up large India-focussed funds over the past few years, their track record on returns and exits has been suboptimal.